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American Airlines (AAL) Dips More Than Broader Markets: What You Should Know


American Airlines (AAL) closed at $36.86 in the latest trading session, marking a -0.3% move from the prior day. This change lagged the S&P 500′s 0.25% loss on the day. Elsewhere, the Dow gained 0.04%, while the tech-heavy Nasdaq lost 0.53%.

Prior to today’s trading, shares of the world’s largest airline had gained 16.96% over the past month. This has outpaced the Transportation sector’s loss of 3.33% and the S&P 500′s loss of 2.35% in that time.

AAL will be looking to display strength as it nears its next earnings release, which is expected to be January 24, 2019. In that report, analysts expect AAL to post earnings of $0.96 per share. This would mark year-over-year growth of 1.05%. Meanwhile, our latest consensus estimate is calling for revenue of $11.08 billion, up 4.5% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.41 per share and revenue of $44.66 billion. These totals would mark changes of -9.63% and +5.8%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for AAL. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 2.87% lower. AAL is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, AAL currently has a Forward P/E ratio of 8.39. This represents a discount compared to its industry’s average Forward P/E of 12.85.

Meanwhile, AAL’s PEG ratio is currently 1.1. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. Transportation – Airline stocks are, on average, holding a PEG ratio of 0.68 based on yesterday’s closing prices.

The Transportation – Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 202, which puts it in the bottom 21% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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Zacks Investment Research
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